Transforming businesses post-Covid

The Institute of Chartered Accountants of Pakistan is lending support to businesses in the UAE. Khaleej Times spoke to Irfan Sheikh, Chairman of UAE Chapter of ICAP Members, on the UAE government's effectiveness of transforming the business landscape and the lessons that can be learnt.

VAT reshapes economic landscape of the UAE
Value-added tax (VAT) has helped drive documentation of economy and diversified the revenue sources of the country. These two factors are long-term positive factors that could help the governments shape economic policies, identify and provide relief to certain sectors.
At the same time, the reduction in purchasing power coupled with the recent impact of both Covid-19 and oil price drop has resulted in various challenges across most sectors. While some of these challenges are short-term, the advantage of detailed documentation offers an opportunity for stakeholders to plan and mitigate the impact to the extent possible. Some structural reforms such as refund claims by tourists are key to shaping a mature and long-term economic landscape of UAE and the region. VAT is one more example of how its wise economic policy making will set the direction for the rest of the region.  

IFRS and its purposes
UAE has been at forefront of IFRS adoption, which are a set of globally accepted standards for financial reporting developed by an independent, not-for-profit organisation called the International Accounting Standards Board (IASB). The overriding requirement of IFRS is for the financial statements to give a fair presentation (or a true and fair view).

As IFRS becomes allowed - or in some cases required - for local or statutory reporting purposes, it provides an opportunity to reduce the number of financial reporting standards used.  It is for this reason that the US based Financial Accounting Standards Board (FASB) have joined hands with IASB to work together to improve and converge U.S. GAAP and IFRS.

Challenges for organisations while transforming finance functions
In the absence of a central accounting and regulatory body and UAE's phenomenal economical rise in such a short time frame, finance function is still largely perceived as a back office function rather than value adding part in most organisations. The biggest challenge is getting the buy in of shareholders and senior leadership.
That said, many companies and groups have started to realise the enormous benefits of a modern finance function. In addition to the cultural and organisational factors, it is important to make the right long-term investments in technology and respond to identified business needs from day one on what is often a long journey of finance function transformation.

UAE Chapter of ICAP Members
Identify and arrange relevant Continued Professional Development (CPD) initiatives focused on both technical topics like IFRS as well as key corporate themes in UAE such as technology in particular robotics, automation, etc. Webinars offer a fantastic opportunity to connect with our global members and coordinate with various local and international networks to provide insights into best practices across the world.

Notable achievements

- Our volunteering job placement initiatives focus on connecting employers with potential candidates and develop a strong network.
- Regular networking, social and sports events for members, affiliates and their families.